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AT&T and SNET to Pay $10.9 Million
for Overbilling Federal Lifeline Program
Washington, D.C. - To resolve an investigation by the Federal Communications
Commission's Enforcement Bureau, AT&T and its former subsidiary Southern New
England Telephone (SNET) have agreed to pay $10.9 million in penalties for
overbilling the FCC's Lifeline program, a program which helps ensure low income
consumers have access to a phone line. An FCC investigation showed that AT&T and
its affiliates continued to provide service to landline customers in the program
without recertifying the eligibility of the customers within the 35 days
required by Lifeline program rules. As a result of these failures, the companies
overbilled the Lifeline program when they requested reimbursement for
participating in the program. The $10.9 million in penalties resulting from
these settlements are in addition to the refund payments that the companies have
previously made to fully reimburse the Lifeline program for ineligible
customers.
"American consumers trust that the companies who receive federal
funds will use that money appropriately," said Travis LeBlanc, Chief of the
FCC's Enforcement Bureau. "We expect companies to be vigilant in protecting
public funds and complying with FCC rules."
AT&T and SNET's failure to remove
ineligible Lifeline customers from their rolls was discovered in 2013 during an
FCC audit of two AT&T Lifeline affiliates. The audit found that a number of
Lifeline subscribers who no longer qualified for the program had not been
de-enrolled following the annual recertification process for 2012 and 2013, a
process in which consumers are required to certify their continued eligibility
for Lifeline. These subscribers were given one extra month of Lifeline support,
and AT&T improperly claimed reimbursement from the government for this extra
month. Additionally, the Enforcement Bureau found other de-enrollment and
recordkeeping violations.
As part of today's settlements, AT&T will pay a civil
penalty of $6.9 million, and SNET will pay $4 million. In addition, AT&T and
SNET are required to adopt rigorous compliance plans related to their Lifeline
activities. The plans outline a number of steps that the companies must take,
including designating a senior corporate manager to serve as a compliance
officer, developing a comprehensive compliance plan, and reporting regularly to
the Enforcement Bureau on compliance, as well as other steps designed to ensure
it is not overbilling the Lifeline program.
Established in 1985, Lifeline is a
federal program that helps ensure qualifying consumers have the opportunities
and security that phone service brings, including being able to connect to jobs,
family members, and emergency services. The program provides support to
telecommunications companies that in turn offer discounts to millions of
eligible consumers. In general, eligible households can receive up to $9.25 per
month in discounts. A household applies for the discounts through their
telecommunications company. These companies are then reimbursed through the
Lifeline Program.
The AT&T Consent Decree can be found here:
https://apps.fcc.gov/edocs_public/attachmatch/DA-15-485A1.pdf
The SNET Consent
Decree can be found here:
https://apps.fcc.gov/edocs_public/attachmatch/DA-15-501A1.pdf
Information on the
Lifeline program can be found here: http://www.fcc.gov/lifeline
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